What is the best business structure for my business? This useful brief has been put together by Natasha at ND Accounting and taxation services, servicing wollongong, warrawong, shellharbour in the Illawarra.

1. Professional and quality accounting
for individuals and businesses
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BUSINESS STRUCTURES
BASIC INFORMATION ON
WHAT YOU NEED TO KNOW

2. This is a brief overview and solely for informational purposes only.
Contact your accountant, solicitor or business advisor
for advice on the best structure for your business
A “business structure”
refers
to the way your business
is structured legally.
There are four main
businesses structures:
Sole Trader
Partnership
Trust
Company

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You are the business and are responsible
for all business operations
SOLE TRADER
WHAT YOU NEED TO KNOW
The simplest and cheapest business structure
The income tax you receive on
sole trader business structure
is measured based on your personal tax rates.
YOU are personally liable for any
debts or negligent acts
that you commit while running your business.

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HOW TO SET UP A BUSINESS AS A
SOLE TRADER
If you are not wanting to trade under your own name
register a business name
Register for is an Australian Business Number (ABN)
You must have or obtain a tax file number
Once you have obtained an ABN, TFN and registered your
business (if applicable), you need to ensure that your ABN is
actually linked to your business name.
You need to register for GST if your expected
or current turnover is $75,000 or over

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PARTNERSHIP
USEFUL INFORMATION
TWO or more people TOGETHER are the business,
(up to 20)
You can still employ people (NOT partners though –
partners CANNOT be employees of the business),
engage other contractors, apply for financing
Partnerships can either be general or limited
Consider a Partnership Agreement, it is advisable to seek
the services of a professional to assist with drafting
such an important document

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PARTNERSHIP
USEFUL INFORMATION
General Partnership - YOU ALL are directly in control of everything,
and all money the business makes belongs to ALL OF YOU JOINTLY
Limited Partnerships - the liability of one or more partners
for the debts and obligations of the business is limited
Incorporated Limited Partnership is a special type of
limited partnership, primarily used by businesses engaged in
high-risk venture capital projects

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HOW TO SET UP A
PARTNERSHIP
Decide if you want to run the Partnership business under
the names of all the partners or to register a business name
Obtain an Australian Business Number (ABN) for the Partnership
The Partnership will also need its OWN Business
Tax File Number (TFN),
partners will still have their own personal TFN
You need to register for GST if your expected
or current turnover is $75,000 or over

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TRUST
WHAT YOU NEED TO KNOW
A Trust is a structure you would be REALLY unwise to try
setting up without the assistance of a solicitor,
accountant or other paid advisor.
A trust is a LEGAL RELATIONSHIP between
one person and another person (or persons).
The first person is called “the Trustee”, while the
second person is called “the Beneficiary”
(or “Beneficiaries” if there are more than one).
The Trust is set up by a person called “the Settlor”.
A trading trust is usually an entity
that holds property (capital) for certain beneficiaries

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WHAT YOU WOULD NEED TO SET UP A
BUSINESS AS A
TRUST
You will need an ABN,
a Business TFN, and a business name for the Trust
You will also need to set up a Trust Deed
You may also need to register your actual business
separately as a Company
Due to the complexity of a trust
you should consult a professional advisor
If the trust is carrying on an enterprise, and it's turnover is over $75,000 or more,
it must register for GST. For non-profit organisations,
the registration threshold is $150,000

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COMPANY
USEFUL FACTS
We recommend that you seek professional advice about
your circumstances and choosing the right
business structure
A company has members (shareholders) who own the
company and directors who run it
Companies have limited liability, but directors
can be personally liable
Here are some useful facts:

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COMPANY
USEFUL FACTS
A company is a legal entity with higher set-up
and administration costs because of
additional reporting requirements
The money a business earns
belongs to the company, not individuals
Companies have no tax-free threshold

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Phone: 4272 3048
E-mail: Natasha@ndaccounting.com.au